As we celebrate our planet, you can invest to show you care. You may want to think about where your money goes, and how that affects the environment, especially as climate change becomes a more pressing issue. Companies are facing increasing pressure from governments and consumers to put the wellbeing of the planet at the forefront of their business. 

How the government is combating climate change

Most recently, the Securities and Exchanges Commission (SEC) began considering new climate directives for businesses. In March 2022, the SEC proposed new rules that would require public companies to disclose their greenhouse gas emissions and the climate risks to their work. Under the proposal, companies would be required to outline their climate risks, the costs associated with moving away from fossil fuel usage, and the costs to their businesses caused by climate change. Companies also would have to disclose the direct and indirect greenhouse gas emissions that their work creates.

Combating climate change has similarly been central to the Biden administration. In November 2021, the U.S. Environmental Protection Agency (EPA) announced plans to reduce methane production, which is the second-biggest contributor to climate change, behind carbon dioxide. By 2030, President Biden is also hoping to reduce greenhouse gas emissions that cause climate change by 50%. But a divided Congress has expressed some opposition to Biden’s plan.  

What companies are doing to address climate change

On a company level, businesses are taking climate change more seriously than ever before. Social media platform Pinterest, for example, announced in April 2022 that it was releasing new guidelines that would remove ads or content that contains misinformation about climate change. Pinterest’s decision followed 2021 commitments from Google and Facebook to crack down on misinformation.

Many companies, such as Levi’s, Costco, BlackRock, Netflix, and others have made promises to cut their carbon emissions. And while some, like Google and Microsoft, have made strides in their emission reductions by pivoting to renewable energy sources like wind and solar, many are reportedly still finding themselves limited in how much they can currently cut emissions. Some companies, like investment firm BlackRock, have been less transparent about how they’re living up to climate pledges. BlackRock, for example, has called on the companies it invests in to remove as much carbon emissions as they add by 2050. Yet BlackRock reportedly  hasn’t disclosed whether those companies are planning to hit that goal.

How climate change affects the economy

Scientists have urged immediate action when it comes to climate change. A failure to reverse the effects of climate change could have devastating consequences for the economy, and for humanity, according to those scientists. The Intergovernmental Panel on Climate Change (IPCC) determined in its 2022 report that in order to limit global warming to 1.5°C, global greenhouse gas emissions must peak before 2025, and cut by 43% by 2030. Globally, methane emissions would also need to fall by about a third. While the report found that emissions remain high, their rate of growth has slowed, potentially showing increasing policies aimed at climate change. 

The U.S. federal government has warned that with the current pace of global warming, the ability to conduct business may be jeopardized. Every four years, the National Oceanic and Atmospheric Administration, a division of the U.S. Department of Commerce, produces something called the National Climate Assessment study.

Among other things, here’s what the most recent report found in 2018. (The next report is due out in 2023):

• By 2050, the average annual temperature of the U.S. could increase by 2.3 degrees.
• The U.S. economy could shrink as much as 10% by the end of the century, losing hundreds of billions of dollars in national and overseas trade, not to mention health costs and disaster relief. Farming and other agriculture will be harmed, through the declining health of livestock, reduced crop yields, and threats to food security, among other things.
• Aging national infrastructure could be further harmed by extreme weather such as flooding, heat waves, and wildfires, leading to threats to the economy, national security, and human health.

“Without substantial and sustained global mitigation and regional adaptation efforts, climate change is expected to cause growing losses to American infrastructure and property and impede the rate of economic growth over this century,” the report says.

There are ways to invest in sustainable businesses hoping to have a positive impact on the planet, however.

Investing for the planet

Sustainability—or creating products in a way that doesn’t harm the planet or people—is also a growing business niche. Numerous funds rate businesses on something called environmental, social, and governance (ESG) and socially responsible investing (SRI). The Sustainability Accounting Standards Board (SASB) provides standards by which ESG investments can be measured. As of July, 2020, the global value of sustainable investments totaled more than $40 trillion.

An investment’s ESG or SRI rating might take into account how companies treat their employees, how ethically they treat people in their supply chains, and the environmental impact of the company. So an ESG or SRI fund could include tech companies striving to reduce their carbon footprints by using alternative energy sources, companies in other sectors working to provide clean water to people who don’t have it, and more. 

In contrast, an ESG or SRI fund might exclude companies that produce fossil fuels that contribute to global warming, or ones whose supply chains may include laborers who work in substandard conditions.

Corporations could increasingly feel pressure to reduce their environmental impact as countries develop plans for “green economies.” A green economy is one that prioritizes reducing carbon emissions to combat climate change, while also creating growth and job opportunities. In the U.S., approximately 9.5 million people are employed by the green economy, which generates $1.3 trillion in revenue each year, according to a 2019 report. 

You can find out more about ESG investing here.

Get Stash

As you celebrate Earth Day, remember that you can invest in stocks and exchange-traded funds (ETFs) that include companies that are fighting climate change by reducing their carbon footprints or providing clean energy.  You can find the environmentally-minded ETFs that Stash offers under “MIssions and Causes.“ Remember all investing involves risk, and you can lose money in the market. Stash urges investors to follow the Stash Way, which encourages diversification, regular investing, and investing for the long term.

The post Earth Day 2022: How to Celebrate the Planet this Year appeared first on Stash Learn.

The World Economic Forum (WEF) is an international organization of world leaders and executives. For fifty years, the forum has held an exclusive meeting in Davos for executives, elected officials, and even celebrities to hear from experts about the biggest issues facing the world and to brainstorm solutions. The meeting has a theme each year and the theme this year is “Stakeholders for a Cohesive and Sustainable World.” Participants are focused on building a more sustainable future in the face of climate change.

Climate Change at Davos

Given the WEF’s focus on sustainability for 2020, climate change has been a major talking point at the conference. Sixteen-year-old Swedish climate activist Greta Thunberg attended the meeting. Thunberg delivered a speech in which she claimed that world leaders are not doing enough to reduce carbon emissions and that the continued inaction of world leaders and companies will allow climate change to accelerate.

Klaus Schwab, the German economics and engineering professor who founded the World Economic Forum, also urged participating companies to aim for net-zero carbon emissions by 2050. Some executives took the opportunity at the meeting in Davos to speak about how their companies plan to reduce their carbon footprints and increase their sustainability efforts.

Leadership at British-Dutch consumer goods conglomerate Unilever promised to reduce unsustainable packaging by 14% by 2025, while Nestlé pledged that it would spend $2 billion on the development of more sustainable packaging, according to Reuters. Meanwhile, Russian aluminum producer En+ said it would spend $850 million revitalizing plants to reduce their carbon footprint. Starbucks CEO Kevin Johnson also promised that the coffee company would cut its carbon emissions in half by 2030.

Investment manager BlackRock also announced its partnership with the Climate Finance Partnership, which hopes to raise $500 million for the development of renewable energy. This announcement came after BlackRock’s chairman and CEO Larry Fink sent a letter to CEOs warning them about how the advancement of climate change might significantly shift the world of finance.

Donald Trump Takes a Different Tone

Despite the theme of this year’s meeting in Davos, President Donald Trump made a speech in which he claimed that climate change is not the immediate threat that scientists and climate experts have asserted that it is. While company leaders outlined their plans for reducing carbon emissions, President Trump spoke in support of America’s position as the biggest producer of oil and gas in the world.

Energy-Conscious Investing

If the theme of this year’s Davos is any indication, confronting climate change is becoming a priority for companies and consumers. You can be climate-conscious in how you invest. Stash offers ETFs that include clean energy companies and companies that are working to reduce their carbon footprints.

When you invest, remember to follow the Stash Way, which includes regular investing, diversification, and planning for the long term.

The post Let’s Dive into Davos appeared first on Stash Learn.

The bushfires have spread across 25.5 million acres in Australia since September, 2019, burning down thousands of houses, killing 27 people, and killing or injuring an estimated 1 billion animals, according to Reuters. The fires have also reportedly produced nine times more emissions than California during its record-breaking fire season in 2018.

Meanwhile, the bushfires have had an impact on the economy in Australia as the government tries to stop them from spreading.

But Australia isn’t the only place potentially affected by climate change. Climate change, in particular rising temperatures and fires, can have an impact on agriculture, health, and infrastructure, among other things, all of which can take a financial toll on economies all over the world. The 2018 National Climate Assessment, which was published by the National Oceanic and Atmospheric Association, found that the average annual temperature of the U.S. could increase by 2.3 degrees by 2050.

The study also found that aging national infrastructure could be further harmed by extreme weather such as flooding, heatwaves, and wildfires, leading to threats to the economy, national security, and human health.

Climate change and economies

Global warming has been linked to the increasing ferocity of hurricanes, as well as the growing severity of droughts and catastrophic forest fires in recent years. Although Australia experiences bushfires annually, these fires are occurring in the middle of a drought and a heatwave.

Scientists suggest that Australia’s fires are thought to be the result of climate change since temperatures have increased by more than one degree in Australia since 1920. In December, 2019, Australia recorded its hottest day in history at 40.9° Celsius, or 105.6° Fahrenheit.

Australia’s economy

Australia’s tourism industry is struggling because of the fires. Visitors have been forced to evacuate areas such as tourist destination Kangaroo Island, according to Reuters. The tourism industry employs 5.2% of people in Australia and accounts for 3.1% of the country’s GDP, according to Bloomberg.

The fires are expected to ultimately cost more than $4.4 billion (AUD) in damages. The Australian government has promised $2 billion (AUD) to aid recovery as homes and farms throughout the country continue to struggle with the fires. The government has also created a National Bushfire Recovery Agency to fight the fires and manage recovery.

While firefighters from Australia and abroad continue to fight the bushfires, they are expected to continue throughout January and February, the height of the fire season in Australia.

Investing When You Can’t Predict the Future

Investing always involves risk and the uncertainty of climate change can complicate the future of business and compound that risk. Remember that diversifying your investments can help protect you from volatility. A diversified portfolio contains a variety of stocks, bonds, funds, and other securities. It will also aim to invest in diverse geographies around the world.

Diversification is also part of the Stash Way, a philosophy that includes regular investing and investing for the long term.

The post Why Australia is Climate Change’s Latest Victim appeared first on Stash Learn.

Far from it. In fact, while people bought more electric vehicles in 2018, they purchased even more SUVs, making them the top-selling automobile in the U.S., and potentially cancelling out the positive environmental impact of electric vehicles.

That’s according to the International Energy Agency, in its annual energy report, released November 12, 2019. The IEA is an organization run by a consortium of 30 countries, devoted to developing clean and sustainable energy.

This year’s report predicts that global energy consumption will soar by 2040 under current climate policies, which could also lead to increased carbon emissions and global warming. The agency found growing use of renewable sources of energy such as wind, solar, and hydropower, but it also found the use of nonrenewable resources that create greenhouse gas emissions are rising at a rate that may outweigh any positive impact from renewable energy.

Top Takeaways from the Climate Report

• Demand for energy will increase by more than 1% every year until 2040, according to the IEA.
• Renewable sources of energy such as wind, solar, and hydropower are expected to make up 42% of energy generation by 2030, overtaking coal as the biggest source of energy, according to the New York Times, which viewed the IEA’s entire 800-page report.
• Solar power is expected to become the biggest source of power by 2040, according to IEA.
• Africa has the potential to produce 40% of the world’s solar energy.
• Electric cars, which operate on batteries that can be recharged at charging stations, are increasingly affordable and popular. But sales of SUVs, which operate on gas and are the second-biggest contributor to global carbon emissions continue to increase. Forty-two percent of cars purchased in the U.S. in 2018 were SUVs, compared to eighteen percent in 2000.

SUVs vs. electric cars

Most U.S. car companies are developing electric cars,  to compete with Tesla, the biggest player in the electric car industry. In October 2019, Ford announced plans to start producing electric cars, as well as a national network of charging stations. Ford also announced plans to develop an electric version of its iconic Mustang. Similarly, General Motors said it will soon release dozens of new electric car models by 2023, to add to its Chevrolet Bolt. Fiat Chrysler also announced plans in 2019 to develop electric Jeeps.

Still, consumers seem to prefer driving SUVs. While sales of electric cars increased by 81% in 2018, there were still only 1 million electric cars on the road. Nearly half of all car sales in the U.S. in 2018 were reportedly for SUVs. Last year, there were 200 million SUVs on the road, compared to 35 million in 2010. SUVs are also the second-largest contributor to global carbon emissions, after the energy and power sector, according to CNBC.

*Source: CNBC

The International Energy Agency says that under current conditions, energy demand will continue to outpace the development of renewable resources.

You can invest in renewable energy companies and companies that develop electric car technology on Stash.

The post The Battle Between SUVs and Electric Cars appeared first on Stash Learn.

But perhaps not anymore.

The chief executives of the leading corporations in the U.S. released a new set of standards, through an organization called the Business Roundtable, about how they propose to operate their businesses in the future. And from now on, people, suppliers, communities, and the environment will allegedly come first.

“The American dream is alive, but fraying,” Jamie Dimon, chairman and CEO of JPMorgan Chase, and chairman of the Business Roundtable, said in a press release. “Major employers are investing in their workers and communities because they know it is the only way to be successful over the long term. These modernized principles reflect the business community’s unwavering commitment to continue to push for an economy that serves all Americans.”

Why is this important?

• The new goals are the opposite of established business norms that prioritize profits.
• For the last 50 years, the stated objectives of big corporations has been reportedly to make money, increase profits for the owners and shareholders, i.e., the people who own the company and its stock.
• A top proponent of the profits over people mindset was Milton Friedman, a leading economist who wrote in 1970 that “the social responsibility of business is to increase its profits.”
• In its 1997 mission statement, the Roundtables said it “wishes to emphasize that the principal objective of a business enterprise is to generate economic returns to its owners…In The Business Roundtable’s view, the paramount duty of management and of boards of directors is to the corporation’s stockholders.”

What’s different this time?

• The Business Roundtable says it wishes to be more inclusive of workers and other non-owners who participate in business.
• The Roundtable’s new statement says: “Americans deserve an economy that allows each person to succeed through hard work and creativity and to lead a life of meaning and dignity. We believe the free-market system is the best means of generating good jobs, a strong and sustainable economy, innovation, a healthy environment and economic opportunity for all.”
• Sustainability and the environment are also key.

What is the Business Roundtable?

Founded in 1972, the Business Roundtable is a pro-business public policy and lobbying group that represents the interests of the largest U.S. corporations, which collectively employ 15 million people, and produce $7 trillion in annual revenue, according to the group.

Who signed the statement?

Nearly 200 CEOs, including:

• Tim Cook, CEO of Apple
• Jeff Bezos, founder and CEO of Amazon, and
• Mary Barra, the chief executive of General Motors
• Michael Dell, founder and CEO of Dell computers.
• Doug McMillon, CEO of Walmart.
• Here’s the full list.

Why now?

The heads of the largest U.S. companies may realize that times are changing, and they need to be more inclusive of people beyond shareholders and other owners, according to experts.

For example, executive pay and the increasing wealth gap between the richest and poorest U.S. citizens has been the topic of conversation from pundits to politicians in recent years, and particularly as the country gears up for the next presidential election.

Since 1978, the average CEO salary has increased 940%, according to the Economic Policy Institute, a labor think tank. Over the same time period, the wages of average U.S. workers have increased only 12%. The average CEO pay at a large company was $17.2 million compared to $56,000 for the average worker nationally.

Companies have also grown more sensitive about how the products they produce actually get made, and have grown more aware of the potential mistreatment of workers, particularly in emerging economies.

There is a growing realization that supply chains must be transparent, and that in order for capitalism to be sustainable, treatment of people matters, according to experts.

Additionally, global warming, and the role of business in producing carbon emissions that contribute to the heating of the planet, has become a top issue.

The post What’s the Business Roundtable and Why Does It Want to Change Capitalism? appeared first on Stash Learn.

That’s the news from the latest National Climate Assessment study, which came out last week. It’s produced by the National Oceanic and Atmospheric Administration, a division of the U.S. Department of Commerce. The climate report comes out every four years.

“Without substantial and sustained global mitigation and regional adaptation efforts, climate change is expected to cause growing losses to American infrastructure and property and impede the rate of economic growth over this century,” the report says.

Here are some key takeaways from the report:

• By 2050, the average annual temperature of the U.S. could increase by 2.3 degrees.
• The U.S. economy could shrink as much as 10% by the end of the century, losing hundreds of billions of dollars in national and overseas trade, not to mention health costs and disaster relief. Farming and other agriculture will be harmed, through the declining health of livestock, reduced crop yields, and threats to food security, among other things.
• Aging national infrastructure could be further harmed by extreme weather such as flooding, heat waves, and wildfires, leading to threats to the economy, national security, and human health.

What’s causing the problems?

Environmental scientists consider carbon trapping gases, such as those emitted by car exhaust, agricultural, and coal-based manufacturing processes to be the primary culprit. These emissions are sometimes called greenhouse gas.

These gases increase something called global warming. Global temperatures have increased by 2 degrees over the last 115 years, and are expected to continue increasing at a faster rate going forward.

Global warming has also been linked to rising seas levels, which in turn leads to more flooding on the coasts. Warming sea temperatures have also been linked to the increasing ferocity of hurricanes, as well as the growing severity of droughts and catastrophic forest fires in the Western states in recent years.

What can be done?

Here are some things the report suggests:

• Reduce the release of carbon into the atmosphere.
• Switch to alternative energy, such as wind and solar, that doesn’t produce carbon gas.
• Drive energy efficient automobiles that pollute less, and switch away from coal-based energy.
• Adapt to climate change with new resilient systems in farming, construction, and transportation.

Why is there controversy?

The 1,600 page report stands in contrasts to the messaging of the Trump administration. In June 2017, the US withdrew from an international accord to fight global warming, and has since taken measures to roll back regulations restricting emissions of greenhouse gases and easing standards for pollution.

The post What Does Climate Change Have to Do With the Economy? appeared first on Stash Learn.

Oh no, Flo!

Approximately 1.5 million people are evacuating coastal areas, as Florence brews itself into a Category 4 hurricane, about 500 miles wide, and packing winds up to 150 miles per hour.

Storms can damage houses, highways and power lines, but they can also shut down businesses and grind daily activities to a halt.

In fact, Florence could inflict as much as $25 billion in damage to the local economy, including the potential destruction of $8 billion in coastal property, according to reports.

What’s at stake

Combined, Virginia and the Carolinas are responsible for more than $1 trillion in economic activity.

• Of the three states, North Carolina has the biggest and most diverse economy. Its Raleigh-Durham research triangle is home to some of the leading pharmaceutical companies, including Merck and prominent educational institutions such as Duke University and the University of North Carolina.
• Nearby Charlotte is a financial services center, serving as the headquarters for some of the largest national banks such as Bank of America and US Bank. Tourists also bring about $23 billion annually to the state, as they flock to North Carolina’s forests and sandy beaches.
• Virginia and South Carolina depend on automotive manufacturing, agriculture, aerospace, and research, and tourism brings in billions of dollars to both states.

Storms and the stock market

And hurricanes can do funny things to the stock market. The stocks of some companies that write insurance policies for homeowners reportedly took a hit on Tuesday, as investors thought about the payouts they’re likely to make for damage.

Others, such as retail home improvement companies and even car rentals, got a boost.

Hark back to Hurricanes Harvey and Maria

Last August, Hurricane Harvey slammed Houston, the fourth most populous city in the country, with 2.3 million people, causing $125 billion worth of damage, according to some estimates.

Houston’s economy is worth $503 billion, according to the Bureau of Economic Analysis. The city is an oil, gas, and petrochemical production hub for the U.S., responsible for about 3% of the gross domestic product, according to the New York Times. Houston is also an oil export center for the nation.

Hurricane Maria struck Puerto Rico in October, killing up to 5,000 people and cutting power and water to the island for weeks.

Puerto Rico has still not fully recovered from the storm, which did about $90 billion in damage.

Cumulative damage from natural disasters in 2017, including hurricanes and forest fires, exceeded $300 billion in 2017—a record, according to federal data.

The post Hurricane Florence: How Storms Can Affect the Economy appeared first on Stash Learn.

They’re a wonder of technology—pistons, gears, valves and wheels, streaming along highways and roads all over the world. For many, cars mean freedom, and the ability to pursue work and travel far from home. Cars also mean convenience. Need groceries ten miles away? No problem.

Cities have grown larger because of them, as residents have moved 20 miles or more from from urban centers–and the suburbs couldn’t exist without them. Numerous industries depend on car manufacturing and sales to continue operating—think oil for gasoline, rubber for tires, and plastics for the innumerable components that go into cars.

And let’s not forget the trucking industry, that moves the products consumers depend on from one corner of the country to another, is also an outgrowth of the automobile. In 2017, revenues for this industry alone were three quarters of a trillion dollars.

In fact, from the days that the first Model Ts sped off the assembly line at a Ford factory more than 100 years ago, to today’s electric-powered Teslas, cars have shaped society and the world we live in. They have allowed us a kind of mobility that previous generations could never have imagined.

Cars drive the economy

Certainly car manufacturing and sales are huge economic drivers. There are about 1.5 billion cars on the planet, and that number is expected to grow to 2 billion by 2040. In 2017, some 88 million cars sold worldwide, and nearly a quarter of those were sold in the U.S. alone.

In the U.S., automobile manufacturing and sales contribute up to 3.5 percent of the U.S. economy, according to research. As an industry, they are the biggest manufacturing and retail segments combined, employing close to 2 million people who either work directly for the big manufacturers, or for companies selling parts and manufacturing components as suppliers, not to mention sale of the vehicles themselves.

Furthermore, workers in the industry earn some $500 billion annually, according to industry research.

The so-called Big Three automakers in the U.S. are Chrysler, Ford, and General Motors. These companies were at one point the largest manufacturers in the world. Today, they are still critical to the economy, but in recent years have been joined by foreign auto manufacturers including Honda and Toyota, which employ some 100,000 workers in the U.S., in addition to their workers overseas.

Cars and climate change

While cars are a huge part of the economy, they’ve taken a physical toll on the planet. Cars contribute to the warming of the earth’s atmosphere, dumping billions of tons of carbon into the atmosphere each year.

Auto sales and dealerships are an industry in their own right, contributing up to 2.6% of gross domestic product

The Environmental Protection Agency (EPA) estimates that about one-third of all greenhouse gases are caused by cars and other forms of transportation that use petroleum fuel. And traffic-related deaths—about 1.3 million people annually die from car accidents around the world—are also a significant concern.

Car makers are aware of the problems, and they are innovating at a fast and furious pace, with manufacturers focusing on making automobiles that are more energy efficient, safer, and—soon—driverless.

Additionally, fuel efficiency has increased over the years, and cars now average about 25 miles to the gallon, an increase of nearly 30% from 2004, according to the U.S. Environmental Protection Agency.

And all of the major car companies now have electric models or hybrids whose motors switch between gas and electric.  As much as five percent of all sales will be for all-electric vehicles in the next ten years, according to recent research.

The future of the car industry

Meanwhile, car companies are some of the biggest innovators around. Whether it’s coming up with the first idea for a moving assembly line more than a century ago, to today’s “just in time” template that conserves time and resources by producing what’s needed only when it’s necessary.

Manufacturers including Chrysler, Ford, General Motors and Tesla are working on the next generation of automobiles. They are using the latest technology, including computer software, high-power lithium-ion batteries, radar, cameras and even lasers to ensure cars run more efficiently, use fewer resources, and keep people safe.

Good to know: Airbags, which were at one time controversial, have saved an estimated 45,000 lives since they were first introduced in 1987, according to the National Highway Traffic Safety Administration.

Collectively, these companies know they must respond to challenges ahead.

Some day soon, driverless cars may become the norm. That could mean having a fleet of shared cars circling neighborhoods, ready to take you grocery shopping, or safely home after a big night out.

“My guess is that in probably 10 years it will be very unusual for cars to be built that are not fully autonomous,” Elon Musk, the founder and chief executive of Tesla said recently at a summit of world leaders.

The post Why the Car Industry is Still a Hotbed of Innovation appeared first on Stash Learn.